Content provided by Mike Forker, CLS Chief Compliance Officer

At CLS, we often highlight the fact that our performance is GIPS® verified; we state it on our presentations, include it in our marketing materials, and post it on our website. We say it often because it is something we are very proud of. But while we often say it, we don’t always explain what it means or why we are so proud that we can make this claim.

The Global Investment Performance Standards, or GIPS standards, are a standardized method for calculating and presenting investment performance. These voluntary standards govern data input, calculation methodology, composite construction, disclosures, and reporting. They are designed to give investors the transparency they need to compare and evaluate investment managers. These rigorous GIPS standards are utilized worldwide and are recognized for their credibility, integrity, scope, and uniformity.

In addition to preparing performance in accordance with GIPS, investment managers, like CLS, can engage a third-party to verify that the manager’s performance adheres to the GIPS standards. As part of the verification process, the independent verifier assesses whether (1) the investment manager has compiled all of its composites in accordance with the GIPS standards and (2) the manager’s policies and procedures are designed to calculate and present performance in compliance with the GIPS standards.

CLS first claimed compliance with the GIPS standards in 2002, and our performance going back as far as 2003 has been independently verified. Each year, we work with a third-party to review our performance policies and procedures, as well as performance data for every client account.  If this seems like a lot of work, it is. We spend countless hours ensuring that we adhere to the GIPS standards, and on a monthly basis, we internally review performance data for over 40,000 accounts. As fiduciaries, we hold ourselves to the highest ethical standards. By engaging a third-party to verify our performance, we show our clients and partners how committed we are to our fiduciary responsibility.

CLS Investments, LLC (“CLS”) is a SEC-registered investment adviser.  CLS employs Ashland Partners, LLP as an independent third-party to verify GIPS performance.  Performance dating back to 2003 has been verified or is in the process of being verified.  To obtain a copy of CLS’s firm-wide composite report, contact us at 888-455-4244.

GIPS® is a registered trademark of CFA Institute. CFA Institute does not endorse or promote this organization, nor does it warrant the accuracy or quality of the content contained herein.

1042-CLS-5/20/2014